Student Loans on Credit Report Twice? Here's What to Do

Credit reports are essential to maintaining your financial health, and as much as they can help consumers, they can also be significant barriers to credit if they contain errors. Since they are used by lenders, creditors, housing providers, and even employers to evaluate your potential creditworthiness, having a significant debt or account listed twice can be devastating in the depiction of your finances to a third party. 

And if you suddenly notice that one or more of your student loans have been listed twice on your credit report, this is exactly what can happen to you. 

We’re going to dig into the issue of double reporting so that you fully understand what it is. Then, we’ll jump into how you can fight these inaccuracies, and what steps you need to take to get them corrected or removed. If you go through all the proper channels and there’s still no resolution, we’ll show you where you can turn for legal help in getting your credit report back to normal.

Understanding Double Reporting: A Deep Dive

Double reporting can have a considerable impact on your credit score and overall perceived financial health. If you are the victim of double reporting, it’s important to address the issue in the most effective way, which requires having a solid understanding of the various underlying reasons that you may be seeing duplicate listings on your report. Let’s take a look at the four biggest reasons. 

Loan Servicing Transfers

Student loans are frequently transferred or even sold to different loan servicers. This process commonly known as loan servicing is common in the lending industry, and when your loan is transferred to a new servicer, that party takes over the full responsibility of managing and collecting on the loan. This includes payment handling and providing customer support. 

During a loan transfer, the new loan servicer will report the loan to the credit bureaus, and in some cases, this can lead to the same loan being reported twice on your credit report. In most cases, the original loan servicer will stop reporting the loan, as they should, and the new servicer is supposed to pick up where the old one left off. 

However, there are some situations where there is a reporting overlap, leading to a duplicate report. 

Consolidation and Refinancing

Another very common reason for double reporting student loans is that they have been consolidated or refinanced. When a student loan is refinanced or consolidated, a new loan is taken out to pay off the existing loans. This new loan is supposed to replace the original loans, which should then show up on your report either as “paid” or “transferred”. 

There are times, however, when the reporting process leads to errors. The original loans might still appear as active on your credit report, along with the current refinanced or consolidated loan, which creates the appearance on your credit report that you have multiple loans for the same debt.

Reporting Errors

Credit reporting errors are simple, they are not uncommon, and they can lead to double reporting. Mistakes happen at all stages of the loan servicing and reporting process, including data entry errors, miscommunications between loan servicers and credit reporting bureaus, and plain old outdated information.

No matter what the root issue is, duplicate listings that show up because of reporting errors can have a significant negative impact on your report and the various calculations of your credit score. They inflate the amount of total debt that you appear to have and create the appearance of multiple loans. This can also dramatically change the perceived debt-to-income (DTI) ratio of someone who may need to take out a large loan.

The Impact of Double Reporting on Your Credit Score

As we’ve mentioned, double reporting can have some devastating effects on your overall credit rating. Since it dramatically changes the amount of debt that your consumer report has on it, it can change your credit utilization to change, cause your credit score to drop, and result in unfavorable interest rates and terms on financial products that you apply for.

Steps to Address Duplicate Student Loans on Your Credit Report

Review Your Credit Report Thoroughly

Before you jump into any action, you’ll need to thoroughly review your credit reports from all three of the major bureaus: TransUnion, Experian, and Equifax. You can get a free copy from each, once per year, or you can use an app like CreditKarma to track your reports daily.

Gather Documentation

Gather all of the needed documents related to your student loans, including loan agreements, payment history, and correspondence with the servicer. This will all be crucial in showing that the duplicate listing is an error.

Contact Your Loan Servicer

The next step is to reach out to your loan servicer and discuss the issue with them. Not only might they be able to explain the situation, but they may also be able to provide a solution immediately. Be sure you keep records of communication with them.

Dispute the Error with Credit Bureaus

If the servicer cannot resolve the issue, the next step is to file a dispute with the credit bureaus that are reporting the duplicate loan. You’ll need to provide them with the documentation that you gathered previously, along with a written explanation of the error, and they will have 30 days to investigate the matter.

Monitor Your Credit Report

Once you file the dispute, you’ll need to keep a close eye on your credit report to make sure the duplicate listing is removed. This step can take some time, but with persistence and continued follow-ups, you should see the corrections reflected in a few months.

Final Thoughts

Dealing with duplicate student loans on your credit report might seem like one of the most intimidating things you’ll have to deal with, financially, but with the right preparation and mindset, you can fight these bothersome clerical errors and take control of your credit report once again. 

Make sure you stay proactive in following up once the errors are reported, and if you still don’t get satisfaction, Fair Credit may be able to help you bring legal action against those liable so that you can get your accurate credit history back.